Dealership goes wrong direction on GPS units, according to Bradyware & Company.
How does a dealership know if they should pay sales or use tax on items they include in the purchase of a new or used vehicle? An Indiana dealership had to pay back use taxes, penalties, and interest for not initially paying tax on GPS systems they installed on certain vehicles.
The Indiana Department of Revenue conducted an audit at the dealership and determined that neither sales or use tax had not been paid on GPS systems that the dealer had purchased and then installed on some vehicles as a condition of financing. Not a bad idea when it comes time to track down delinquent debtors.
The dealership maintained that the GPS units should not be subject to sales or use tax under the “sale for resale” exemption because they were installed and sold as part of the vehicle. Furthermore, the dealership stated that they had met the three conditions that entitled them to be eligible to access the exemption.